INTERNATIONAL BUSINESS; In Moscow, U.S. Strives for Greater Share of Oil Exports

By ERIN E. ARVEDLUND

Published: May 25, 2005

Samuel W. Bodman, United States energy secretary, met with Kremlin officials Tuesday to relay the concerns of American energy companies about Russia's investment climate, and added that Russian oil exports to the United States should be ''10 times'' what they are currently.

In an effort to revive flagging energy cooperation between the two countries, Mr. Bodman met with his counterpart, Russia's minister of industry and energy, Viktor B. Khristenko, and the economic development and trade minister, German O. Gref, regarding critical issues.

Among them were a long-delayed oil pipeline to Murmansk, in Russia's far North; potential joint projects in liquefied natural gas; and ways to improve the investment environment, perceived as hostile since the Russian government partly renationalized its largest private oil company, Yukos.

''My observations ran from the need to improvements in transparency, the sanctity of contracts and judicial independence,'' Mr. Bodman said at a news briefing at the American Embassy here, ''all matters that have caused concern in the private sector.''

Since the terrorist attacks of Sept. 11, 2001, the United States has sought alternative sources of energy to replace supplies from the Middle East, and Russia's crude production in recent years had grown as fast as 10 percent a year.

But the attack on Yukos, once Russia's largest private oil company, has crimped its record production growth, and prompted worries about the safety of property rights.

''Russia's oil exports to the U.S. total about 230,000 to 240,000 barrels a day,'' Mr. Bodman said. ''It should be 10 times that or more, given the reserves that are here.''

Asked whether he raised the Yukos affair specifically with the Kremlin officials, Mr. Bodman answered: ''Not that I remember. I guess I did allude to the fact that it was one of the reasons that there was uncertainty. I think I probably did in some of the conversations and I didn't in others.''

Meanwhile, big United States energy companies have been largely sidelined from direct investments in Russia's oil and gas sector.

Last year, Exxon Mobil abruptly lost its license to the Sakhalin-3 concession, a huge project in Russia's Far East that it has been developing for roughly a decade.

Exxon Mobil's chief, Lee. R. Raymond, said in December that the company was re-evaluating whether it would invest more money in Russia until there was clarity on the investment climate.

In January, the Kremlin said it would re-auction the oil-rich block on the remote eastern island of Sakhalin, though Exxon Mobil said the deal had been exclusive.

Mr. Bodman acknowledged that the United States was competing globally with China and India for energy investments.

Russia's plans for a pipeline to Murmansk, destined to ship oil to America's Eastern Seaboard, are now suspended, and a pipeline to Asian customers ending in Nakhodka in Russia's Far East is on the drawing board.

''To the extent it is viewed as being best for Russia to build every pipeline to China, then that's what they should do,'' Mr. Bodman said. ''I respectfully suggest that there are better ways.''